Pricing - Are You Selling Groceries or Liquor?
This forum has a lot of advice on pricing your services ... don't give them away, raise your prices, etc. is one common piece of advice. But that isn't the whole story.
Many years ago when I worked in the grocery business, I was taught about selling groceries vs selling liquor. The difference? In a couple of words, pricing vs volume.
The grocery store has a lot of competition and thus keep their markup (prices) low and make their profit from sheer volume.
The liquor store (normally) does not sell in volume and has a higher markup, thus their profit per item is much higher.
And both (to the extent permitted by law) use loss leaders to help bring in customers.
Both business models have their place, but keep in mind when giving advice your business model may not be the one someone else is using.
And keep that same thing in mind when accepting advice
.
Marvin
Many years ago when I worked in the grocery business, I was taught about selling groceries vs selling liquor. The difference? In a couple of words, pricing vs volume.
The grocery store has a lot of competition and thus keep their markup (prices) low and make their profit from sheer volume.
The liquor store (normally) does not sell in volume and has a higher markup, thus their profit per item is much higher.
And both (to the extent permitted by law) use loss leaders to help bring in customers.
Both business models have their place, but keep in mind when giving advice your business model may not be the one someone else is using.
And keep that same thing in mind when accepting advice
.Marvin
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